Is it the more upright ergonomics, the less peaky engine output, or a more compliant suspension that was preferred?
None of those, except maybe the suspension. The 675 three cylinder I had wasn't peaky at all, and I didn't mind the aggressive seating position.
It's the fact that it doesn't do 70 miles an hour in 2nd gear. With a sports bike you can never really go full throttle and enjoy all it has to offer, and when you do, you know shouldn't be doing it. Before you know it you're going 120 mph+ on single lane back roads, and that isn't really safe.
Moreover, if you crash it it'll be incredibly epxensive to fix, and you have to worry about people keying it and thieves stealing it.
If I lay down my supermoto I pick it up and carry on. Replacing a panel is about $30, and you're highly unlikely to break anything else.
With a supermoto, your top speed is around 120 mph, and it takes a while to get there. You can go full throttle in any gear you want, enjoy everything it has to offer.
Most importantly though, due to the frame geometry and weight (mine weighed 95kg), you can really throw it around corners. Shift back a gear or two-three and you can actually slide around corners. Try doing that on a sports bike. You can also wheelie in every gear, and even shift while doing wheelies.
Due to the suspension you can hop on sidewalks, drive down stairs, etc. Very easy to get around in town. I drove mine with slicks and was never worry about crashing due to wet leaves or gravel being on the road. If the back breaks out you can easily bring it back in line.
The exhaust note of a one cylinder is something special as well. Very deep and aggressive. Having flames come out of your exhaust on downshifts is pretty fun as well.
In short, it's just 100x more fun to ride a supermoto in town and small back roads. The one thing it can't really do is highway driving. It's quite uncomfortable, but I did that maybe once a year. My Husqvarna'd engine also needed to be fully revised every 3000 miles, and the tank needed to be refuelled every 50 miles. Thats mainly due to getting 60hp out of a 450cc racing engine though.
The new KTM 690 SMC-R has a bigger engine and a slightly bigger tank, making it a bit less hardcore. It's probbaly a bit less fun to ride due to the higher weight, but it has more normal service intervals in return.